Solar energy surpassing oil use in Africa – with no subsidies
The charity that I have the privilege of chairing, SolarAid, has set up a wholly-owned social enterprise that is becoming a major retail brand, SunnyMoney. It has sold a million solar lights in Africa in the last four years, 650,000 in the last year alone. With this hockey-stick growth we have created the largest retailer of solar lanterns on a continent of 54 countries, operating out of just four of them. In doing so, we are wiping kerosene use out, creating a cascade of social good ranging from education (kids have a lot more time to study at night), through development (deferred kerosene costs create a staggering average increase in annual household income of some 20 per cent), to global warming abatement (a kerosene lantern emits an average of fully a tonne of greenhouse gas over its lifetime).
How many solar lights do we have to sell to rid Africa completely of oil use in lighting by 2020? The answer is about 250 million.
SolarAid couldn’t do that alone. There wouldn’t be a proper market if we did. But we do aim to play a lead role in this mission to eradicate the kerosene lantern from Africa in six years’ time. We reckon that leadership might amount to a 20 per cent market share: 50 million light sales, all profits recycled to the cause along the way. If so, that’s one step we have taken, and 49 to go.
If kerosene use for lighting is wiped out in Africa, so it can be right across the developing world. And that amounts to fully 3 per cent of all oil use globally, including transport.
What about all the many other uses of oil, gas and coal around the world?
Here’s the thing. The key factor in replacing kerosene lanterns with solar lights is economics. Solar is beating oil use on equal terms in lighting Africa, with no subsidies. And so it is in multiple markets for fossil fuel use today, with many more to come in the next few years. Analysts at McKinsey, AllianceBernstein and other such places say that the systemic cost reductions in manufacturing and installing solar amount to what they call a ‘terrordome’ for the business models of traditional energy utilities. These old-world companies are as a result in such trouble that they may even be in what analysts have started to call a ‘death spiral’. They say the solar cost-down trend will continue, increasingly being augmented by cost reductions in storage technology, to such an extent that that the business models of the oil and gas industry will soon begin to be undermined too.
Which brings us to the flip side of the story. Every step carbon fuel abolitionists take forward is likely to become easier in the future. This is because carbon fuels, on the whole, will become more expensive to extract over time, and the increasingly enormous amounts of cash needed to access them become ever harder to justify.
Fossil fuels: no longer a sound investment
Enter Carbon Tracker, another NGO that I have the privilege of chairing. They are a think tank of financial experts, analysts who have published a series of reports since 2011 arguing that significant elements of fossil fuel resources are at risk of being stranded, particularly if policy-making continues to focus on a 2º global warming danger ceiling, and that capital expenditure planned for developing these resources is in danger of becoming money wasted.